I could've sworn that the whole idea of "trickle down" economics had been pretty much invalidated by now, but the Bush Team sems to think that geting rid of dividend taxes for stock will somehow help the economy. Even MSNBC thinks that it won't help the average person.
Let's take a quick look at the main part of this singularly pathetic excuse for stimulus: repealing the tax on stock dividends.
First, this only affects people who own stock that pays a dividend, which not all stock does. Most of us have common stock (if any) not preferred stock, which means that even if the company does dividends, we may not see them.
Second, it assumes that the company in question even paid federal income tax, and most big ones don't.
Third, the people who do gain a benefit from this, won't see it until First Quarter of 2004. Some stimulus.
Fourth, don't confuse this with capital gains tax, which is a tax on profits from sales of stock. Would help some people, but mostly the rich, and again, not till next year.
Fifth, if dividends are only taxed twice, that's less than most other forms of income, so get over it already. Your paycheck gets hit four or five times for payroll tax, income tax, sales tax, gasoline tax, ticket surcharges, excise fees for long distance or cable, alcohol taxes, state and local income taxes, etc...
Raising the tax break for children from $600 to $1000 is ok, but really won't increase spending that much. School clothes, school supplies, and toys are primarily made in foriegn countries these days. Why send more money to China, when we need jobs here?
Obviously, we should be looking at other economic relief plans. Relief from Payroll taxes would be nice, direct, and immediate. It would certainly help me and everyone I know out, and could cost less.
Posted by Chris at January 6, 2003 04:54 PM